When it comes to your bank statement, lenders will be looking at various factors to see if you can keep up the mortgage payments. Over the years, we have seen an increase in inquiries regarding if gambling transactions look bad on their bank statements.
There is nothing illegal about licensed gambling so an occasional bet on the world cup or regularly using internet betting sites isn’t a problem. However, like a lot of gambling adverts, they do urge customers to gamble responsibly and these principles are the same when applying for a mortgage.
The role of the lender is not to tell you how to live your life or spend your money or even lecture you about the ethical rights and wrongs of gambling, however, they do have a duty (underscored by mortgage regulation) to be responsible when accepting customers for a mortgage.
Lenders may need to prove to the regulators that they are making well-thought decisions. Therefore, it isn’t unreasonable for the lender to have expectations of the people they lend to when it comes to their finances.
Think about it. If you were lending your own money to a ‘friend’, would you lend it to someone who frequently gambles or the one who doesn’t?
Having the odd gambling transactions on your recent bank statement doesn’t automatically mean your mortgage application would get declined. As mentioned before, it is not illegal to gamble.
However, the lender will look into these transactions to see if they are reasonable and responsible. The factors that they will look at are the frequency of the transactions and the size of the transactions. Furthermore, they will take a deeper look into the individual’s account and the impact upon the account balance.
When it comes to these transactions, infrequent small amounts that make no impact on your regular credit bank balance are not likely to be regarded. If you’re in a situation where you bet most weeks or you have constantly overdrawn money, the lender is expected to see you as irresponsible and may decline your application
Providing bank statements to your lender is required as it’s a way to show how you manage your money and helps the lender when deciding if you are financially reasonable or not through your bank statements.
Lenders are financial institutions that, either directly or as part of a wider group, often sell current accounts, overdraft facilities, credit cards, and personal loans. Because of this, they have an understanding that these things can all play a role in financial planning.
You may find yourself using your overdraft, however, if maxing out your overdraft becomes a regular occurrence, this is not ideal. Lenders will look for things that could show your account is not handled well such as overdraft fees or returned direct debit.
Credit transactions from payday loan companies are another thing lenders will want to see (i.e. , if you put on your application that you have no other loans but regular loan payments appear then this could be a problem.)
As well as looking for any missed payments, they might also consider how much of a typical month gets spent overdrawn – i.e., measuring the sustainability of the mortgage by looking at situations such as if you only go into credit on payday and the rest of the monthly earnings get stretched.
The best way to improve things is to be sensible, and if possible, plan ahead. A bank would ask for up to three months of your most recent bank statements. This evidence will show your salary credits and all your regular bill payments.
If you know you’re likely to apply for a mortgage in the near future, it can be good to try to make sure that you avoid any of the above issues. Work on presenting your bank account in the best light and take a break from gambling.
You can find help from your mortgage broker in Cardiff as some lenders may ask for fewer bank statements than others or some may not even ask for them at all.
Being careful in the run-up to any mortgage application is best as lenders reserve the right to request bank statements in certain circumstances. Remember, if you do gamble, please gamble responsibly!
A mortgage advisor in Cardiff can provide specialist advice if you are a first time buyer in Cardiff. They will be there to help you through your mortgage application and guide you through the whole mortgage process as well as getting you on track so that a potential lender may be impressed with your credit history.